Fitch Raises Axtel Following Exchange

Fitch Raises Axtel Following Exchange

February 1, 2013

Fitch has raised Axtel’s rating to B, it says, following the Mexican telecom’s debt exchange finalized this week. The rating was lifted from restricted default, where it was briefly placed after a previous C rating. The exchange “resulted in a less levered capital structure. Nevertheless, the company still continues to face a strong competitive environment,” the agency says. Axtel has $580m in debt following the exchange, which Fitch says reduces pressure on Axtel’s liquidity position. After the operation and a $250m sale and leaseback of cellular towers also finalized this week, Axtel's total debt to Ebitda ratio should improve to 2.7x from 3.7x. In the exchange, Axtel received acceptance from holders of $142m (51.6%) of its 7.625% 2017 bonds and $355m (72.5%) of its 9.00% 2019 bonds. It offered $594.61 per $1,000 principal, comprised of $500 in senior secured 2020 bonds, $44.61 in peso-denominated dollar-indexed 2020s and $50 cash. Holders accepting before the early deadline receive an additional $116 per $1,000 principal. The 2020 notes start at 7.0%, and step up to 8.0% after the first year and 9.0% after year two.

Fitch has raised Axtel’s rating to B, it says, following the Mexican telecom’s debt exchange finalized this week. The rating was lifted from restricted default, where it was briefly placed after a previous C rating. The exchange “resulted in a less levered capital structure. Nevertheless, the company still continues to face a strong competitive environment,” the agency says. Axtel has $580m in debt following the exchange, which Fitch says reduces pressure on Axtel’s liquidity position. After the